Chongqing - China's logistics property market has entered a tenant-led adjustment cycle, moving away from rapid land acquisition and large-scale development toward asset optimization and quality-based competition, according to a new report by Savills.
The real estate services firm released its 2026 China Logistics Property Report on June 30, saying the sector has moved into a more mature phase as supply and demand are reshaped, regional performance diverges, and tenants focus more on cost control and supply chain efficiency.
"As new project development slows, location, operational capability, and the ability to meet tenants' increasingly diversified needs are becoming core competitive strengths," said James Macdonald, head of research at Savills China. "The industry has officially entered a mature stage of development."
Savills said the next six to 12 months will depend on three main factors: how effectively macro-level industrial policies support real warehouse demand, the stability of expansion by e-commerce and trade-related tenants, and the pace of new supply adjustment and absorption in the high-standard warehouse market.
The AVATR Digital Intelligence Factory in Chongqing Liangjiang New Area. (Photo/Zheng Ran)
High-standard warehouses in China generally refer to modern logistics facilities with better floor loading, higher clear height, fire safety systems, digital management capability, and access to major transport networks. These facilities are increasingly used by e-commerce platforms, third-party logistics providers, manufacturers, and cross-border trade operators.
In 2025, China's consumer market recovered moderately, with total retail sales reaching 50.1 trillion yuan and consumption contributing 52% of GDP growth, according to the report. Online retail sales of physical goods grew 5.2%, while instant retail continued to expand rapidly. Savills said the instant retail market is expected to reach 2 trillion yuan by 2030, pushing warehouse networks toward shorter delivery chains and locations closer to urban consumers.
Manufacturing also remained a key source of logistics demand. China's value-added industrial output above the designated size rose 5.9% in 2025, while manufacturing accounted for around 25% of GDP. Emerging sectors such as integrated circuits, industrial robots and new energy vehicles recorded notable growth, although overall corporate expansion remained cautious.
Trade added another source of demand. China's trade surplus reached nearly $1.2 trillion in 2025, while high-tech product exports rose 13.2%. Savills said land-based trade corridors, including the China-Europe Railway Express and the New International Land-Sea Trade Corridor (ILSTC), helped support inland logistics hubs such as Chengdu, Chongqing, Xi'an and Zhengzhou.
According to China Railway Nanning Group, trains on the ILSTC transported 660,000 TEUs from January to June this year, with an average monthly volume reaching 110,000 TEUs. Cargo categories have expanded to 1,362 types, connecting 76 cities in 18 Chinese provinces and 593 ports in 128 countries and regions.
Chongqing's EV boom fuels western China's logistics demand
In western China, Savills said logistics property supply and demand have moved closer to balance. The regional vacancy rate fell 3.2 percentage points year on year in 2025, supported by limited new supply and steady demand. Chengdu and Chongqing continued to lead the region, backed by electronic information, automobile manufacturing, and large consumer markets.
Chongqing's industrial base is one example of this demand. The city produced 2.788 million vehicles in 2025, up 9.7%, according to the Chongqing Municipal Commission of Economy and Information Technology. New energy vehicle output reached 1.296 million units, up 36%, while the automotive industrial cluster exceeded 800 billion yuan in scale.
The city's manufacturing logistics are also changing. SERES' smart factory in Chongqing has developed an industry-first "smart logistics port," using AI scheduling and unmanned electric trucks to automate parts delivery. The factory has also adopted a "factory-in-factory" model, bringing core suppliers into the production site for localized, synchronized manufacturing.
Consumer logistics is also reshaping warehouse demand in Chongqing, a megacity with more than 32 million people. JD Logistics' Asia No. 1 smart logistics park continues to operate in the city, while instant retail operators and supermarket chains are expanding front warehouses and short-chain delivery networks to support fast delivery of fresh food, consumer goods, and daily necessities.
A Taobao distribution center in the Xiyong Comprehensive Bonded Zone in Chongqing. (Photo/Zheng Ran)
Savills said regional divergence remains significant nationwide. South China faces higher vacancy after concentrated new supply, though its port and trade advantages support long-term value. East China is gradually stabilizing, while North China remains under supply pressure. Central China is benefiting from industrial relocation and has become a focus for capital deployment.
Louisa Luo, managing director and head of capital markets and industrial logistics at Savills China, said the market has entered a phase of inventory optimization and deep adjustment.
"Short-term market pressure remains, but core hub cities and high-standard warehouse assets still hold long-term value," Luo said. "Asset renovation, smart upgrades, and full-chain services will be key to capturing opportunities and moving through the cycle."